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Commentary

Apple’s magazine subscription service is starting to take shape. The tech giant is expected to announce the service at a March 25 press event. Analysts also expect the iPhone maker to unveil a
TV streaming service that will compete more directly with Netflix and Hulu.

Software developer Steve Troughton-Smith pried into a test version of Apple’s operating system and shared his
findings in a series of tweets. The magazine subscription service will be called Apple News Magazines and will let subscribers download and store publications for offline reading.

That means
readers without a reliable Wi-Fi or cellular connection, such as travelers on long-haul flights, won’t miss out on their favorite magazines. Readers can receive pop-up notifications when
publishers post their latest issues.

Apple’s digital newsstand will use a PDF format to make the layout of magazine pages consistent among different screen sizes. That suggests a
more traditional reading experience, instead of “infinite scrolling” that’s become more popular on smartphones, tablets and websites.

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Troughton-Smith found Apple will have
genres, including health, fitness, food, cooking, entertainment, gardening, home, lifestyle, politics, science and technology, among other topics.

Still unknown is how much Apple plans to
charge for the service.

Last year, the company acquired Texture, which charged a flat fee of $9.99 for access to more than 200 magazines. Apple may be able to bundle the magazine service with
newspapers that command a higher subscription price, such as The Wall Street Journal or The New York Times.

Apple’s push into magazine content isn’t entirely without controversy, especially when it comes to the amount of subscription
revenue the tech giant is willing to share with publishers.

Last month, The Wall Street Journal reported Apple asked publishers to hand over half of the subscription revenue they earn
from Apple’s digital newsstand. Videogame developers like Epic Games, the maker of the hit game
“Fortnite,” and rival streaming services like Spotify, have balked at Apple’s fee structure in the App Store. Spotify even filed a complaint against Apple with Europe's antitrust
authorities yesterday.

Magazine publishers need to weigh the upside of gaining access to Apple’s 1.4 billion active devices, including 900 million iPhones, against the possibility of
cannibalizing print, website and app readership. Even if a fraction of Apple’s users sign up for Apple News Magazines, publishers can reach a significant audience.

Publishers are
familiar with the strategy of charging low subscription fees to entice more people to sign up for a subscription. By boosting their rate bases, they can entice more national brands to buy ads.

While Apple’s TV streaming service likely will grab most of the headlines, Publishing Insider will keep an eye on what Apple News Magazines means for publishers.